Buyer Beware – Largest Companies like SolarCity and Sunpower Have the Highest Costs

A recent analysis of nearly 17,000 projects reported to the California Solar Initiative has revealed a 40% average difference in the prices that solar contractors charge customers. It is a buyer beware market, with some solar contractors charging nearly double the price of others.

From July through December of 2013, the average residential and small commercial system cost $30,948 and had 6,600 watts of DC rated power. By dividing these two numbers, the average solar cost per watt was $4.70. The publicly available CSI data set reveals that companies like FreeCleanSolar.com offer the lowest cost solar panel systems with rates at $3.00 per watt, while the largest solar companies like SolarCity and Sunpower charge above average rates of $4.94 and $5.17 respectively. That translates to a price difference between the smallest and largest companies of more than $12,000.

Highlighting the extreme disparity, some companies like Vivint and American Solar Direct charge $18,000 more than the lower-priced companies. These prices are for full-service projects with similar components and include PV system design, permits, parts, installation labor and warranty. Even lower prices are possible with do-it-yourself (DIY) or self-installed PV solar kit projects.

The following table ranks the cost per watt and shows the average price difference and lowest cost price difference for some of the largest solar companies operating today.

Company

Average Cost
per Watt

Average Price
Difference

Price Difference
to Lowest Cost

Industry

$4.80

0

$11,148

FreeCleanSolar

$3.00

-$11,148

0

Solar Universe

$4.06

-$4,138

$7,011

Petersen Dean

$4.06

-$4,122

$7,026

REC Solar

$4.08

-$4,051

$7,097

Real Goods

$4.13

-$3,674

$7,474

Solarmax

$4.46

-$1,489

$9,659

Horizon

$4.47

-$1,474

$9,674

Helio Power

$4.60

-$588

$10,560

Verengo

$4.65

-$254

$10,894

Sungevity

$4.69

$20

$11,168

Smart Energy

$4.74

$354

$11,503

Solar Service Center

$4.77

$561

$11,709

Paramount

$4.83

$954

$12,102

360 Solar

$4.91

$1,458

$12,606

Solarcity

$4.94

$1,631

$12,779

Sunpower

$5.17

$3,145

$14,293

Killion Energy – GCI Solar

$5.40

$4,688

$15,836

Vivint

$5.82

$7,434

$18,582

American Solar Direct

$5.89

$7,926

$19,074

Many home owners are not even aware of the price differences. The financing structure of popular solar lease and power purchase agreement (PPA) contracts hides the true cost of projects. The customer is promised a “No Money Upfront” sales pitch, yet they end up paying considerably more while being locked into a long-term monthly contract.

To avoid gouging, consumers should always shop around to compare solar prices and make sure you are not paying more than you have to.